Considered Opinion
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Efficient Maintenance is a Major Factor in Operation of Commercial Vehicles, Although Factual Information is not the Sole Criterion
/NDEFINITENESS is anathema to cost accountants who rightly endeavour to quantify all forms of expenditure. Whilst this is a desirable objective, there are limits on the extent to which it can be achieved. Particularly does this apply in the service industries, such as transport, when the evaluation of a service is partly, or even largely, a matter of opinion in the final resort.
In assessing the value of a transport service a trader or industrialist, for whom the service is being performed, has not, only to make the relatively simple distinction between a good or bad service, but—more difficult—determine just how good a service is essential in his particular case. For example, whether a twice-weekly delivery was really necessary or whether once a week was sufficient. Even in this admittedly over-simplified example, the final decision as to which of the two rates of delivery was, in fact, adopted would be largely dependent upon opinion, however experienced and considered, rather than comparative factual data.
In this context it could rightly be added that where sufficient factual information was available, clearly indicating that one course of action was 'preferable to another, then the need for a managerial decision would hardly be necessary in the real sense of the word. In fact, it is virtually daily routine in any sizeable transport organization for many decisions to have to be made solely on the basis of a combination of known facts and imponderables.
Probably nowhere in transport operation is indefiniteness more superficially apparent than in relation to maintenance and allied aspects, such as reliability of vehicles on service and their economic life. .
Included in ssome requests for advice on how to set up in transport operation is the suggestion that a formula, or yardstick, should be compiled so that it could be readily proved when a vehicle was due for replacement. Whilst the need underlying this request is understandable, the' provision of such a formula would, in practice, be impossible.
Throughout this series and • in "The Commercial Motor Tables of Operating Costs" it is repeatedly emphasized that, whilst accuracy is a desirable objective in recording operating costs, consideration has also to be given to overall simplicity. Moreover, in the initial compiling of such costs and their subsequent : interpretation, practical experience in transport operation is essential if the right emphasis is to be given to the results obtained.
Too-insistent demands for such ready-made formulas to facilitate decisions of policy may, in fact, belie a lack of practical operational experience for which no formula is a substitute. Yet the ultimate success of the entire organization may well depend upon the maintenance policy. Persistent breakdowns, with the inevitable dissatisfied customers, are the more obvious results of inefficient maintenance, due either to a wrong policy decision in the first place or its unsatisfactory execution.
LESS obvious and, therefore, more difficult to determine, is the somewhat nebulous "margin " to be provided against the possibility of a breakdown whilst a vehicle is on service. This, of course, is the reason for preventive maintenance and, whilst costing should provide a guide, it is largely an engineer's decision as to what " excess " maintenance is necessary to prevent such expensive and disruptive occurrences. 7 _
A similar approach is necessary when deciding the economic life of a vehicle, assuming that it is agreed.that there should be an overall policy in this respect which, in effect, implies their replacement before the likelihood of breakdowns becomes too great for the operator to continue to provide a reliable service to his customers.
In considering various aspects of operating commercial vehicles. It should not be overlooked that the division of operating costs into 10 items, as in" The Commercial Motor Tables of Operating Costs," although convenient is nevertheless arbitrary. There is not necessarily a clear-cut distinction between all the 10 items, from which it follows that some of the items are interrelated. Thus, the amount of interest charged on the initial outlay would have some bearing on the quality, as well as the size, of vehicles purchased. Correspondingly, the quality of the vehicle must have a relation with maintenance costs and rate of depreciation, as determined by the ultimate lift of the Vehicle. Unless all vehicles in a fleet were of similar type of construction and came within a comparatively narrov* range of capacity, it 'would not bc possible to compile a formula againsi which maintenance costs—and, possibly vehicle life—could be checked.
In addition to the interrelation o: some Of the items of operating cost, thc definition of items is also, to some extent arbitrary and has a special connotation for the particular purpose for which they are used. Thus, in the overall division of the 10 items of operating costs a: between standing and running costs, thi
rot standing costs " has a dual implication. Whilst it iplies all costs which have to be met throughout the period e vehicle is in the possession of the operator it will be ited that the word " standing " is not strictly accurate since ese continuing costs—such as licence fees and insurance emiums—persist whether the vehicle is standing or mobile. evertheless, it is generally understood what is implied by the
in contrast to the other group of costs, namely, running sts, which are incurred only when the vehicle is mobile.
IIMILARLY, the term " maintenance " could be misunderiod when used in connection with commercial vehicle ierating costs unless it is clearly defined for this purpose forehand. As with many other aspects of transport operation, eoretical connotations have to give way to more practical age. Thus, theoretically, if rnaintainance of a vehicle is carried it literally, then depreciation would not arise, as the vehicle mild be kept in its initial condition. Obviously, this attitude mid in practice be totally unrealistic, but it is nevertheless !portant to note that a gradual decline in the vehicle's contion, despite whatever efficient maintenance system is vloyed, is generally accepted.
It is thus established on this aspect alone that there can be finality as to what is the correct amount of maintenance— d corresponding expenditure—to be given to a vehicle in any rticular set of circumstances. As stated earlier, it is largely thin the province of an engineer, rather than a cost aountant, to determine whether or not a vehicle is fit to dertake the work on which it is employed.
Additionally, the circumstances in which a vehicle may be iployed can vary substantially. Three major factors are the )graphical location. of the journeys undertaken, the type of ffic carried relative to the wear and tear on the body and, s obviously, the urgency and dependence which customers ice on their traffic.
The substantial trade in used commercial vehicles emphasizes differing conditions on which operators have to evaluate : fitness of a vehicle for any particular job. It does not by y means follow that the original owner of a vehicle has been king in sound judgment if, after disposal of the vehicle, the )sequent user operates the vehicle for a substantial mileage ore he, in turn, disposes of it. A more likely reason is that :re is no comparison between the utmost reliability :essitated by the traffic carried by the first owner as compared 1 the goods moved by the second operator possibly, for imple, on purely local delivery. Alternatively, in large tanizations a corresponding situation is met with by the emotion" of vehicles formerly employed on longor dium-distance work to local collection and delivery.
:t is. therefore, apparent that the cost of maintenance as ween one group of vehicles and another cannot readily be npared to any useful purpose unless the basic requirements which the respective maintenance policies were originally ermined are known. And even then such requirements may so dissimilar as to make the comparison virtually valueless. kpart from variations in the cost of maintenance as a result varying operating conditions, these could also be the reason determining whether or not an operator undertook to do own maintenance. For example, it would ncit be economic install such basic essentials as an air-compressor and ricating systems (which in other circumstances would be isidered a minimum requirement) if only a few vehicles were :rated. It would obviously be cheaper to contract the work to a public garage, despite the addition of a reasonable ,fit margin on the cost of such work.
. FACTOR which, in post-war years, has become of increassignificance in determining maintenance policies is the ilability of suitable labour. Because, when determining the ional economic policy, full or near-full employment has been rerequisite; the overall labour shortage has been extenuated he engineering trades with the advance of mass-production, h the resulting expansion of existing plants and deployment new factories. Whilst the problem of labour shortage is common to most industries, the present position is particularly acute relative to the maintenance of motor vehicles, and if th s trend continues it could alter completely the traditionally accepted balance as between the class of vehicle originally purchased, the amount and method of maintenance, and the overall replacement policy.
Competition for labour is obviously more acute in the industrial areas and there are undoubtedly many road transport operators in rural, or semi-rural. areas who are well satisfied with their present maintenance arrangements, based on a nucleus of long-service and experienced fitters for whom an adequate range of equipment has been provided. Whilst the likelihood of this satisfactory situation being disrupted is considerably less than in an industrial area, if it does occur then the supply of replacement labour will be substantially less. or even non-existent in the case of the specialists.
It will therefore be prudent for a new operator setting up in a rural area, or alternatively an existing operator opening a new depot, to weigh up carefully the likelihood of such a situation arising, even if he is in the fortunate position of being ,assured of adequate staff in the first instance. In this connection. the outlay on servicing equipment on a comparatively modest scale could be 1500 or more, and it would indeed prove a costly exercise if, in addition to the probable under-employment of much of the equipment during most of its normal life, there were to be added periods of complete non-usage due to staff shortages.
Apart from the direct financial aspect of maintenance, the amount of administrative time involved should not be underrated. Where the organization is not large enough to employ an engineer of sufficient status to be given sole responsibility for all maintenance, then many relevant decisions must be made by the transport manager himself, and the time so given must inevitably detract from his main preoccupation, namely, the movement of traffic economically and efficiently.
Relative to operating costs, the term " maintenance " is used in an omnibus sense to include any task from washing and greasing to a major overhaul, possibly involving virtually rebuilding the chassis and renewal of the body. This is in contrast, to some extent, to the use of the word "maintenance" in connection with private cars, when the tendency is to restrict it to the comparatively lighter tasks.
Because of this wide range of work undertaken under a general heading of "maintenance," it is possible for an overall policy to he based on a segregation of the work to be done, so that the simpler tasks are conveniently performed daily, or at frequent intervals, by the operator on the site whilst the heavier repairs are contracted out. Alternatively, with the advent and extension of the exchange unit system, it is possible for the operator to retain control of much of his maintenance. without being too dependent on the availability of skilled
labour. S.B.